What’s the current situation in Libya
According to Aljazeera and NYTimes, United Nations-brokered peace talks aimed at resolving the political turmoil in Libya have started in Morocco, hours after the airport in the Libyan capital Tripoli was bombed.
Warplanes from Libya’s UN-recognised parliament in Tobruk carried out the air strikes on the airport in Tripolii, which is currently governed by a rival administration.
Libya’s legislators are split between the UN-recognised government in the eastern city of Tobruk and the General National Congress, a rival legally-installed government in the capital, Tripoli.
The political turmoil fuelled rival militias and allowed fighters claiming association with the Islamic State of Iraq and the Levant (ISIL) group to gain control of the cities of Sirte and Darna.The UN Security Council meeting came as Libya’s state-run National Oil declared itself inoperable at 11 oil fields after a series of attacks by rebels purportedly linked to ISIL.
— Al Jazeera America (@ajam) 5 Mars 2015
Source: Defensenews: Libya urged the UN Security Council on Wednesday to approve a request for military purchases as it struggles to combat Islamic State extremists and protect its oil fields.The internationally-recognized government, one of two bodies that claims to rule troubled Libya, has asked the council's sanctions committee to grant an exemption to an arms embargo and allow it to beef up its air force.
— Middle East Eye (@MiddleEastEye) 5 Mars 2015
The force majeure – a legal step shielding the company from liability if it cannot fulfil contracts for reasons beyond its control – was announced on Wednesday shortly after gunmen attacked the Dahra oil field near Libya’s central coast.
The attack on the oil field prompted a counterattack by government forces that included air strikes, said Mashallah al-Zewi, oil minister of the country’s Tripoli-based government.
Current Oil price trends
Oil prices hovered around an equilibrium on Wednesday late European trading,at 1700 GMT (1800 CET), a barrel of Brent for April delivery was worth 60.81 dollars on the Intercontinental Exchange (ICE) in London, up 26 cents from Wednesday’s close, helped by the disruption of Libyan supply, and a bit shaken by the surprising increase in US stocks just the day before .
On the New York Mercantile Exchange (NYMEX), a barrel of WTI for the same period would lose 12 cents to 51.41 dollars.
“Even if US crude inventories increased two and half times more than expected, prices have barely budged,” noted Alastair McCaig, an analyst at IG.
Crude oil prices have fluctuated around the same on Thursday, in a market that has quickly digested the surprise rise in US crude inventories as this was announced yesterday by the Department of Energy (DoE).
The market is indeed interested in the bullish DOE report elements, including the fact that reserves of oil terminal Cushing (Oklahoma, South) only rose by 500,000 barrels, marking a sharp slowdown.
For several weeks, the experts were concerned of the high level of inventories at Cushing, fearing that because of he fact that stocks storage capacity reaches its maximum, this would result in ballast the WTI.
How the oil prices have been affected by Libya’s situation
Moreover, disruptions in Libya on oil supply continued to assist during Thursday.
“Stocks have increased in the United States last week, but the Brent and WTI have not really changed since the force majeure declaration in Libya and a seasonal improvement in demand continue to support prices for the moment” Abhishek Deshpande noted Natixis.
The Libyan National Oil Company (NOC) said on Wednesday the “state of force majeure” in 11 oil fields in the center of the country after the multiplication of attacks against oil sites in this region.
By invoking this clause, Libya is no longer under obligation to fulfill its share of supply contracts for 11 oilfields :Al-Mabrouk, Al-Bahi, Al Dahra; Al-Joufra, Tibesti, Al-Ghani; Al-Samah; Al-Baida, Al Waha, Al-Dafa, Al-Naqa.
— Middle East Eye (@MiddleEastEye) 5 Mars 2015
The NOC has also threatened to “close all ports and oil fields” if security did not improve on the sites.
“The political situation created in Libya means for now that the country’s production will certainly not meet the levels reached in 2012, to 1.5 million barrels per day,” as analysts reported.
Libyan production was around 400,000 barrels per day at the beginning of the week, “it is probably less now as a consequence of declaring a “force majeure” they added.
Related Information about Libya
- Libya Asks UN To Approve Arms Contracts
- Libya Declares Force Majeure Over Oil Fields in Central Region
- 21 BEHEADINGS OF EGYPTIAN CHRISTIANS IN LIBYA : THE DAY WHEN EARTH BECAME A LAND OF WAR AND TERROR
- LIBYA’S SITUATION IS GETTING WORST IN ALL MAGNITUDES